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Waters from the Sierra Nevada that once carved its mountains through hydraulic mining are the same that provide recreational opportunities and drinking water to the residents of Nevada City.

And while it may seem simple that Nevada City’s water comes from the Little Deer Creek, goes through the town’s water treatment plant off Gracie Road, then makes its way to the city’s homes and businesses, the particulars of that process pose a conundrum to city officials, which boils down to projected water rate increases over the next decade.

“We have an old system,” said Verne Taylor, the public works director. “So when you schedule work and once you start in, something happens, and it all changes.”

One of those “something happens” occurred a few years ago when Taylor was trying to attend to a minor leak downtown. To isolate a section of pipe, Taylor went to close a valve in front of Friar Tuck’s restaurant on the corner of Pine and Commercial streets. But because the valve was more than 150 years old, it broke.

Taylor had to back up and close more valves farther away.

Because Nevada City does not have enough valves at its pipe intersections, and those it does have are so old many do not completely close the flow of water, Taylor said.

“So what happens is you go from isolating seven blocks to isolating 21,” Taylor said.

The majority of the pipes that run through the heart of the city in its historic downtown are 163 years old, dating back to the mining era that sprouted Nevada City.

The city’s trees also cause a fair amount of undetected leaks, Taylor said, as their roots reach for moisture.

Taylor has seen aged pipes sprout leaks with a little nudge from a shovel, he said. The size of those pipes and their web-like inter-connectedness also pose potential problems.

Rather than a direct line that pumps water to one of Nevada City’s main water storage tanks, water coming from the treatment plant instead has to trickle through every business and home in downtown Nevada City before it drips into the storage tank near the Rood Center.

“During the day, the city has a negative water flow,” Taylor said. “When everyone sleeps and the bars close, the water finally makes it to the tank.”

Because use affects the amount of flow and because the city’s small public works department has to manually monitor its water flow on the aged system, sometimes water overflows its three storage tanks.

“If we produce too much water, it just flows out the overflow, which is not cool at all,” Taylor said. “We are wasting money producing chlorinated water.”

This is especially problematic in summer months when the city supplements its untreated water by purchasing from Nevada Irrigation District, Taylor noted. That purchased NID water, which is treated at a cost, is at risk of spilling to the ground. It’s also a waste of time to have staff runaround to all the storage tanks to constantly check them, added Nevada City Manager David Brennan.

“Every morning, our water operator drives to all three tanks, reads where the flow is and determines if they are spilling and turns down production,” Taylor said.

The simple solution is a computerized water-monitoring system, Taylor said, which would allow the water operator to regulate flow from home.

In addition, Nevada City’s water flow is primarily driven by gravity, Taylor said. With differently sized pipes potentially bottlenecking water flow, a fire hydrant at the top of a hill may only get 35 pounds of water pressure while a hydrant at the bottom of the hill gets three times as much pressure, Taylor said.

“Gravity doesn’t necessarily work to the benefit when you are trying to fight a fire up at the top of the hill,” Taylor said.

But perhaps the biggest water conundrum facing the city is whether to abandon its 33-year-old water treatment plant.

“Our problem is it was designed for 2 million gallons a day max flow, and we’ve never gotten that out of it, which scares me,” Taylor said.

The water treatment plant sits on land leased from the federal Bureau of Land Management, and terminating the lease could entail returning that land to its original state. The city could purchase the land but only if it determines the NID replacement option for treated water is a bad deal.

“We’re weighing the cost of upgrading our plant versus what it would cost to buy treated water from NID,” Brennan said. “We are still analyzing that because there are multiple costs in buying that.”

Initially, the city estimated a complete rebuild might cost around $5 million but has instead eyed a less than $1 million retrofit to increase water flow.

The city has funding for some of these projects — about $1.6 million from CABY, which comprises 30 organizations in four watersheds (the Cosumnes, American, Bear and Yuba rivers) and functions as a vehicle to bring funding into the region.

“That will be a major boost to improvement of the water system,” Brennan said. “We have got some resources to get a lot done over the next few years.”

However, Brennan noted that any projects beyond that may necessitate the increase in water bill rates.

“What we may be talking about is setting aside some additional Measure L money as a reserve for the water fund in case we need to do a massive capital improvement program,” Brennan said.

At their Jan. 23 meeting, members of the Nevada City Council postponed residential water rate hikes until at least next year. Council directed staff to look at implementing a schedule of increases over the next decade. Some of those options include 2 percent annual hikes. Individual rates vary depending on pipe size.

The city’s water rate increases were originally implemented to offset a more than $765,000 water fund deficit and eventually to build a reserve fund.